“How much does it cost to file bankruptcy?” This is often the first thing that someone says to me when they call. What they want to know is the total cost for attorney fees and the filing fees. I understand why they ask me, because for someone in financial difficulty, the cost for filing bankruptcy is an important question to answer. But I simply can’t answer that question without knowing more about my clients and their situation, at least not when it comes to attorney fees. I answer the question about filing fees in my article “Bankruptcy Fees and Fee Waivers”.
Pricing a bankruptcy case isn’t like calling around town for the price of a Nintendo Wii or a DVD player to see if Walmart, Bestbuy, Target or Costco is cheaper. That is because when you call around town to ask prices on a set item, you are asking about a readily identified item with set costs to each store, and the buyer is hoping one store can provide it cheaper. But you and your problems are unique from everyone else, and your particular needs preparing your case may be different from someone else filing a Chapter 7 or Chapter 13 bankruptcy case.
That said, similar cases between attorneys and the prices charged for a particular case are often within a certain range, once an attorney is able to review the case to determine what needs to be done for that client. You can usually get the best/worst and the least experienced/most experienced for a relatively similar fee, give or take. For the most part, attorneys gauge how much time they will have in a case when they price it out, and the more time they think it will take, the more likely it is that they will charge more. Even if you have an easy case, you want an attorney who will take the time to talk to you, explain the process and be sure your paperwork and documents are prepared correctly.
There is no such thing as a one size fits all bankruptcy case. The cost should depend on the facts of the case, individual to each client and their situation, and the time needed to handle it properly. Some people have easy cases, and others have complex cases. There may be odd situations involved that need pre-bankruptcy planning to get you the best results, or other issues that need to be addressed prior to filing the case. Sometimes the clients themselves just need more help. Some clients have all their information readily available, while others need more attention from the attorney to put together the information needed for the bankruptcy petition or to explain the legal process.
Lawyers aren’t one size fits all either, and you don’t necessarily want the cheapest lawyer in town. Some attorneys can offer lower prices because of office efficiency and higher use of staff rather than attorney involvement. Others might not have the overhead of an office to support, especially when starting out. Some might offer lower prices because they are less experienced and willing to work for less. Watch out for anyone who charges less because they are cutting corners in preparation, advice, or the time to explain the process to you.
The client’s location can affect the cost since some courts have different requirements and expectations of what needs to be in the paperwork. Local rules and practices vary greatly from city to city, and state to state. So don’t expect to pay the same thing as your cousin who filed in another city, and make sure that the attorney you use is experienced in the place you are going to file your bankruptcy case.
While you don’t have to have an attorney to file a bankruptcy case, doing it yourself is not a great idea. Some people have simple cases and can get through on their own but even people with simple cases have issues that can trip them up. A simple mistake can cost someone far more than an attorney would have cost them, and often once the case is filed the mistakes might not be able to be fixed or it will cost more to hire an attorney to try to fix them then it would have to have done the job right from the start. Most attorneys will discuss how to pay the fees. They may be able to advise you how to come up with fees that you didn’t know you would pay, or they will work out a payment plan for you if time allows.
Ultimately what an attorney sells you is time, and if you are paying less, you want to be sure that you aren’t short changed in the time spent on your case, with you, or with the ability and experience of the attorney. Do you have a good feeling about the attorney? Does she seem like she cares about you? Is he knowledgeable about the law, and willing to spend the time to explain it to you? No matter the cost of the case, it is a lot of money to someone in financial trouble. You want to be sure that you hire the right attorney for you, one that takes the time to explain the process to you, and has the experience to do the job right. Remember that you get what you pay for.
See: Bankruptcy Basics: How Much Does Bankruptcy Cost? and Bankruptcy Basics: What Should A Bankruptcy Costs?”
